S-Corp Tax and Accounting | Gary Grab & Associates Inc.

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Tax and Accounting Services for S Corporations

At Gary Grab & Associates Inc., we understand that S corporations come with many obligations. Many small business owners want to benefit from the tax breaks that S corporations offer, but need additional resources in place to handle the compliance concerns that come along with maintaining an S corporation. According to the IRS, an S corporation is a corporation that elects to pass corporate income, losses, deductions, and credits through to its shareholders for federal tax purposes.

S corporations are set up by having all of the individual shareholders submit Form 2553, the Election by a Small Business Corporation, to the IRS after forming the corporation. For companies that don't plan to go public and have less than 100 shareholders, electing to be treated as an S corporation for tax purposes is a useful option that eliminates the double taxation of a C corporation.

The S corporation must observe all corporate formalities imposed by the state of New York, including registration to do business within the state. There are also strict qualification requirements that must be maintained which mean that only individuals, certain estates and trusts, and certain tax-exempt organizations are permitted to be shareholders. S corporations are also required to allocate profits and losses among the owners proportional to the percentage of ownership or number of shares held within the corporation.

Syosset, New York S Corporation Tax Requirements

S corporations are required to file Form 1120S, which is the annual tax return for S corporations. In addition, S corporations must also file Schedule K-1 which provides reporting on how profits and losses from the business are allocated to the owners. As individuals who are considered as owners and not self-employed, S corporation shareholders only pay self-employment taxes, including Social Security and Medicare tax, on any earned income and not distributions from the company.

Tax and Accounting Services for S Corporations in Syosset, New York

Not understanding which forms need to be filed, or paying the required taxes on earned income can also lead to problems for shareholders. At Gary Grab & Associates Inc., we help business owners stay in compliance with the state of New York S corporation rules. If you have not yet incorporated your business, we recommend setting up an S corporation if your sales are greater than $40K/year. An S corporation protects your personal assets from liabilities created by your business and delivers essential tax breaks that save you money.

As a part of our tax planning strategy for S corporations, the tax specialists at Gary Grab & Associates Inc. will help you plan ahead for the upcoming year's tax liabilities. We provide quarterly consulting, monthly financials, and professional bookkeeping to help you stay on top of your tax and accounting obligations. Finally, our payroll services can assist with your payroll tax filings. Prior to the start of tax season, we also recommend that our clients come in to review everything and ensure that all business income and expenses have been properly reported.

S-Corp Tax & Accounting